This response has resulted in the Prices of Cryptocurrencies crash and the private players are now at risk. All the major digital currencies saw a fall of around 15 percent and more, with Bitcoin down by around 18.53 percent, Ethereum fell by 15.58 percent, and Tether down by 18.29 percent.
However, banning Cyptocurrenies will be technologically impossible by many industry executives and experts as the govt cannot stop the use of the local currency to buy crypto and there isn't a way to ban crypto wallets which exists only online.
Here are 10 points on why India seeks to ban Cryptocurrency in India:
1. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is listed for introduction in the Lok Sabha in the winter session, scheduled to begin from November 29.
2. The Bill seeks to create a framework for the creation of the official digital currency to be issued by the Reserve Bank of India.
3. It also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
4. Currently, there is no regulation or any ban on the use of cryptocurrencies in the country.
5. Against this backdrop, Prime Minister Narendra Modi, earlier this month, held a meeting on cryptocurrencies with senior officials, and indications are that strong regulatory steps could be taken to deal with the issue.
6. Recently, there have been a rising number of advertisements, featuring even film stars, promising easy and high returns on investments in cryptocurrencies in recent times, amid concerns over such currencies being allegedly used for luring investors with misleading claims.
7. Last week, the Standing Committee on Finance, chaired by BJP member Jayant Sinha, met the representatives of crypto exchanges, blockchain, and Crypto Assets Council (BACC), among others, and arrived at a conclusion that cryptocurrencies should not be banned, but it should be regulated.
8. The Reserve Bank of India has repeatedly reiterated its strong views against cryptocurrencies, saying they pose serious threats to the macroeconomic and financial stability of the country and also doubted the number of investors trading on them and their claimed market value.
9. El Salvador is the only country to recognise cryptocurrency as a legal tender.
10. Private digital currencies/virtual currencies/ cryptocurrencies have gained popularity in the past decade or so. Here, regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks.